EconPapers    
Economics at your fingertips  
 

How important are early investment experiences on subsequent investment decisions? A laboratory experiment on asset allocation

Dimitra Papadovasilaki, Federico Guerrero, James Sundali and Gregory Stone

Managerial Finance, 2015, vol. 41, issue 6, 582-590

Abstract: Purpose - – The purpose of this paper is to examine the influence of early investment experiences on subsequent portfolio allocation decisions in a laboratory setting. Design/methodology/approach - – In an experiment in which the task consisted of allocating a portfolio between a risky and riskless asset for 20 periods, two groups of subjects were confronted with either a market boom or bust in the initial four periods. Findings - – The findings suggest that after controlling for demographic characteristics, the timing of a boom or bust during the investment lifecycle matters greatly. Subjects that faced a bust early in their investment lifecycle held less of the risky asset in subsequent periods compared to subjects who experienced an early boom. Originality/value - – To the best of the authors knowledge this is the first laboratory study investigating the role of early aggregate shocks on subsequent investment behavior.

Keywords: Asset allocations; Behavioural finance; Booms and busts; Laboratory experiments; Portfolio decisions (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/MF-09-2014-0 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:mfipps:v:41:y:2015:i:6:p:582-590

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... s/journals.htm?id=mf

Access Statistics for this article

Managerial Finance is currently edited by Professor Don T Johnson

More articles in Managerial Finance from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2020-03-29
Handle: RePEc:eme:mfipps:v:41:y:2015:i:6:p:582-590